Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Tuesday, Nov. 5:
HSBC sees progressive dividend policy intact despite higher capital requirements
New capital requirements in the United Kingdom are unlikely to affect HSBC Holdings Plc’s (00005.HK) progressive dividend policy although there are still uncertainties in the regulatory details, the lender’s chief executive Stuart Gulliver said in an analyst conference after the bank’s third-quarter results. HSBC gained more than half of its net profit of US$13.06 billion from Hong Kong and the UK for the first three quarters this year, up 24 percent from a year ago. However, its third-quarter pre-tax profit has dropped 19.6 percent from the second quarter amid lackluster performance in its global banking and markets division. The bank managed to save US$400 million expenses under its sustainable cost saving plan during the quarter, with operational costs reduced by 4 percent.
Analysts doubtful about reform details at Party meeting
The upcoming top political meeting in Beijing this month is likely to disappoint the market players who are hoping for detailed and deep reform measures, analysts said. The new leadership, which took over the reins earlier this year, needs time to consolidate its power and gain more support before rolling out detailed measures to reform the country’s household registration system, taxation regime and land transfer mechanism, among others, the analysts said.
ECONOMY AND BUSINESS
Fuguiniao may scrap listing plan of fully transferable H shares
Fuguiniao Group Ltd. is said to have scrapped its plan to list fully transferable shares in Hong Kong amid difficulties in obtaining approval from the China Securities Regulatory Commission, sources told HKEJ. The apparel company is now looking to list ordinary shares in the city by the end of this year instead. The watchdog was purportedly allowing mainland companies to float their fully transferable shares in Hong Kong by request earlier this year. However, none of the cases have been approved so far, given taxation issues and potential changes the new leadership of the country may put in place, the sources said.
Google does not regret withdrawing from mainland China
Interview: Google Inc. (GOOG.US) sees withdrawal from mainland China two years ago as a right decision that it does not regret, said executive chairman Eric Schmidt. The company made the decision due to considerations on the integrity of the freedom of the Internet and it is unlikely to gain a large chunk of market share in the country given the Chinese government’s protection of domestic firms, Schmidt said, adding that the middle class has already showed its discontent over internet scrutiny. However, the company still looks forward to further its business opportunities with mainland companies, such as low-end smartphone maker Xiaomi, Schmidt said.
HKEx to enhance large volume transaction in after-hour trades next year
Hong Kong Exchanges and Clearing Ltd. (00388.HK) plans to launch next year a mechanism for large volume transactions and three new product types in the after-hour futures trading session, the bourse operator said as it unveiled Monday its first review report of the after-hour markets after half a year operation. The exchange is also considering lengthening the operation time for the so-called night session when brokerages are well prepared. There were an average of 6,292 transactions a day during the after-hour trading session over the past six months to Oct. 6, with no more than 2.3 percent volatility from the closing prices in the day-time session, data at the exchange showed.
Brother of Anson Chan dies after plunging from flat in Lantau
Philip Fang Shun-sang, a younger brother of former Hong Kong chief secretary Anson Chan, has died after plunging from his flat at a residential building in Lantau Sunday night. He was 72. Police said they found nothing suspicious about his death. No suicide note was found. Fang was said to have suffered from both emotional and physical illness. Anson Chan said through her spokesman that she was too sad to make any further comment.
HKTV rejects govt claim about its finance rating in license application
Hong Kong’s Chief Executive Leung Chun-ying is expected to reveal on Tuesday more details of the government’s decision not to grant a free-to-air license to Hong Kong Television Network. Yesterday, legislator Michael Tien said he was told at a meeting with Leung that a government consultancy report found HKTV was rated the lowest among all three applicants in finances, one of the four criteria for assessment. HKTV rejected the claim, saying it was quoted out of context. It called on the government to release the full report, not selectively.
China urged to take early steps to tackle local government, corporate debts
A research institute under China’s Tsinghua University has estimated that the total amount of the country’s local government debts could reach 19 trillion yuan. Although it said the local authorities have overall capability to repay the debts, the size of local government debts and corporate debts looks set to rise further. In view of the potential damage to the country’s financial and economic restructuring, authorities must take early preventive measures to contain the risk.
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